Kennewick Office100 N. Fruitland, Suite CKennewick, WA 99336Phone: (509) 586-4194

Fax: (509) 582-5091

Richland Office1337-B George Washington Way

Richland, WA 99352Phone: (509) 943-7330

Fax: (509) 943-7331

www.marplecpa.com

We would like to wish all of our clients and families

the very best for this holiday season!

Firm CPAsBob. MarpleSteve MarpleBob Marple Jr.Kent ToyodaKay MamiyaErin PlumbRosalie Dawe Staff MembersLinda Strickland Office ManagerLeeIlah Marple (The Boss)Teresa KeslerJennie ReynoldsGinette HouchinDenise HartEmily Hart

Alternative Minimum Tax (AMT)AMT (Alternative Minimum Tax) is the equivalent of a second tax system (as if one of our complicated systems is not enough). Taxpayers figure their tax under our general tax system and then refigures it under the AMT system. If the AMT calculation is higher you pay the higher tax amount.

AMT is triggered by a number of items including large capital gains, large itemized deductions (especially taxes), AMT preferences, and claiming a high number of personal exemptions among other items.

The easiest way to determine if you may be subject to AMT is to run out your specific income, deductions, and filing information using tax planning software.

New Firm MembersWe have two new CPA’s who have recently joined our firm. Rosalie Dawe will be joining our firm January 1st of next year. Rosalie will be working in our Richland office and is currently in route to the Tri-Cities from Pensacola Florida where she was a CPA with a public firm. Rosalie was in the Air Force in a prior career and got the opportunity to travel all over the US.

Erin Plumb joined our firm in June of this year. Erin is a 1996 graduate of Oregon State University and has worked in public accounting since her college graduation. Erin is married and has a daughter age 7 and a son age 4. She enjoys horse riding, skiing, boating, camping, running, and swimming.

We welcome both Rosalie and Erin to our firm! We will be updating our website to provide further information about Rosalie and Erin. www.marplecpa.com

Tax PlanningGeneral InformationIt is hard to believe but another year is drawing to a close. Where do they go and why do they go so fast? The speed the years fly by seems to increase exponentially with your age!

With a number of weeks left in the year there is still some time to focus on some year-end moves that can save you some taxes – both on your 2007 return and in future years.

The easiest way to evaluate tax planning strategies is to use tax planning software and enter estimates for expected income and deductions. Provided below are tax-saving strategies and other issues to consider with regard to year-end tax planning. Please let us know if you should have any questions or have interest is completing some specific tax planning using our company tax planning software.

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A Few Tips for 20085 Essentials for a Winning New YearAs you review the end of 2007 and consider making 2008 New Years resolutions, give some thought to Chris Carmichael’s (founder of Carmichael Training Systems, Inc. and personal coach to Lance Armstrong) 5 Essentials of a Winning Life:

Fitness1) Nutrition2) Career3) Relationships4) Health5)

All of these components are interrelated and can improve the quality of your life and work. Each one requires work.

A Great Way to Start your DayConsider adding the 7 minute exercise plan of Lee Holden to your daily routine. His exercises are designed to energize your day. More information on his specialized exercise programs is available at his website:http://www.exercisetoheal.com/

Credit Monitoring & Account FreezesEnroll with a credit monitoring service and consider freezing your credit information. (Equifax and TransUnion, starting October 15th, 2007 are allowing you to freeze your credit information. With Equifax this procedure is completed by submitting a request and payment of a fee.)www.equifax.com

Financial TipsReview the beneficiary listings of your asset, retirement, and insurance accounts.

Do you know the rate of return your investments have been earning and the management fees your are paying for the management of these funds? This information should be provided to you on a regular and consistent manner by your investment manager.

Complete an insurance checkup. Insurance is one of the largest personal expenses we have and one of the most important. Review your life, disability, property (including umbrella coverage), auto, business, medical, and long-term care coverage you currently have for adequacy, amount, and fit.

Take a video tape of your home and contents and keep a copy at your business. Do the same at your business and keep a copy at your home.

Summarize all of your pertinent personal and business financial information and share with your spouse.

Remember charities and family in your gift giving. There is no way to take it with you and the one who has the most in the end is not the winner. If you can afford to do so why not make gifts today while you can see the joy it can bring.

New Donation Rules for 2007There are new charitable donation rules for 2007. You can no longer deduct any cash contribution unless you retain either a bank record (such as a cancelled check or credit card receipt) or a written statement meeting tax law requirements from the charity.

Keep in mind you will need written statements meeting tax-law requirements for cash donations of $250 or more (a bank records will not be good enough) from the charity.

Accelerate Deductions and/or Defer IncomeIf you expect to be in a lower or at least no higher tax bracket next year, consider pulling some 2008 deductions into this year. Charitable donations work well for this strategy. You could also accelerate your property taxes or other deductions but watch out for the AMT (see separate article on AMT).

If you have a cash basis business you can also control the timing of income by holding billings to delay the receipt and corresponding reporting of income a year.

Expensing Equipment PurchasesIf you own a business and meet certain criteria, you may be able to deduct the purchase of certain equipment up to $125,000. If you are a sole-proprietor your savings can be more than your marginal income tax rate as a qualified purchase would also reduce any corresponding self-employment tax.

Energy Tax Credits2007 will be the last scheduled year for nonbusiness energy tax credits. These credits are generally limited to a lifetime amount of $500. The tax credit is10% of what you pay for certain energy efficient insulation, windows, and roofs along with 100% of certain heat pumps, hot water heaters, and advanced air circulating fans up to the total tax credit limit amount of $500.

Hybrid VehiclesHybrid vehicle purchases qualify for tax credits which can go as high as $3,400. Lexus and Toyota purchases made after September 30th no longer qualify for the credit and the credit may not be used to offset AMT.

Domestic Productivity DeductionThe productivity deduction has increased to 6% for 2007 for those businesses qualifying for the deduction.

Sales Tax on Big Ticket PurchasesAs things sit now, 2007 is the last year for the sales tax deduction for individuals. If you are planning a big ticket purchase such as a car or boat in the near future you may want to consider making that purchase prior to the end of the year.

Retirement PlansThere are a number of retirement plan options available to employees and to business owners. Some of these retirement plans can still be set up for 2007 with deductions obtained for contributions timely made to the new plan.

Capital Gain & Loss StrategiesEvaluate the status of your investments and consider taking some capital loss prior to the end of the year if you have capital gain or up to the $3,000 annual capital loss limit. Watch out for the wash sale rules.

If you expect to be in the 15% tax bracket for 2008 your might want to postpone taking long-term capital gain until 2008 when your tax rate on such sales will be 0%.

Gifting IRA AccountsIf you are age 70 ½ or older you can arrange to transfer up to $100,000 of otherwise taxable IRA money to a charity. Such a transfer is income tax free to you, but you do not get to claim a deduction for the amount given.

Kiddie TaxThe Kiddie Tax will now apply to those under the age of 24 who are still dependents. This tax can result in the income of a taxpayer’s child being taxed at the parents tax rate rather than the tax rate of the child.

Flexible Spending AccountsIf you have access to a flexible spending account arrangement through your employer consider maximizing your contributions to the plan.

Withholding & Estimated PaymentsIf you will owe income taxes for 2007 review your withholding and estimated payments to ensure you avoid any interest charges on the taxes you will have owing.

Tax Planning....Continued from page 1

Websites – To ViewThere are many great websites on the Internet. Provided below are a few sites you might want to check out next time you are on the Net.

http://www.sightspeed.com/This is a video service for both free and subscription use. Add a webcam and an account at this site and you can video conference between any two or more people each with Internet access. The video not the best but not bad for free.

http://www.forbetterlife.org/This is truly an amazing site. Once you go to the site click anywhere in the area identified as common ground and a scrolling screen will appear in which you can select various sources of information and you control the scrolling by where you place your cursor. I came across this site by looking up the organization after seeing some of their great public service ads on TV. This is a wonderful site!

Internet SecurityThe amount of information available on the Internet is truly astounding. It can be a great resource and our country has grown to depend upon it. There is also a dark side to the Internet and everyone, individuals and businesses alike, whom use the Internet need to protect themselves.

In general, each computer accessing the Internet or networked with a computer accessing the Internet should be protected. Computers should be running virus and spyware protection software which is routinely updated. For spyware, running more than one application is likely best.

There should be both a hardware and software firewall between your computer and the Internet and your operating system should be configured to update routinely.

You should use secure passwords and not write them down where they can be easily found (not on a sticky note on your monitor).

If you keep confidential information on your computer you should use a folder or drive encryption software to

encrypt and password protect this sensitive information.

E-mail attachments should be encrypted and password protected if they contain sensitive personal information.

(We have found the easiest way to accomplish this is to password protect a PDF file using PDF writing

software.)

Web service providers have increased their security. If your web bank is not offering a second or third layer of authentication, you should ask them why. You can not be too careful, especially with accounts accessing cash, savings, or investments.

You should be extremely cautious with giving any personal information out.

We have used the computer experts at NetworkTask.com(managing members Craig Sutton and Aaron McCall – 783-9558) for a few years now and have been extremely happy with their services.

http://www.actsofkindness.org/A sister website to For a Better Life.

http://www.livingto100.com/This is an interesting site with a 40 question test to take to give you some idea of your life expectancy.

http://www.loc.gov/index.htmlAsk a reference librarian at the Library of Congress a question or check out some of the resources at this government site.